EPA Releases 2018 Final RFS Blending Requirements

12/1/2017

EPA Releases 2018 Final RFS Blending RequirementsThe RFS Fight is Not Over

Yesterday, the EPA finalized its 2018 biofuel volumes for the RFS. The RFS rule maintains the current 15-billion-gallon ethanol mandate for 2018 and reduces the current 311-million-gallon cellulosic biofuel volumetric blending mandate to 288 million gallons for 2018. This mandate covers fuel considered the “next generation” ethanol and maintains the current 2018 biomass-based diesel volumetric blending mandate of 2.1 billion gallons for 2019. This mandate covers biodiesel most often made from soybeans, vegetable fats and animal fats.

After an uprising from Midwestern Senators regarding potential reductions in biofuel quotas for the RFS, EPA Administrator Scott Pruitt responded in a letter assuring them that he would no longer consider cutting biofuel quotas in the RFS. Several Senators outside of the Midwest responded with a letter to President Trump insisting that he meet them as well as the Midwestern Senators to work out an agreement to reduce RIN values which are negatively impacting refiners and some small business petroleum marketers who are unable to take advantage of blending at the terminal rack.

PMAA is disappointed with the EPA Administrator’s letter to Midwestern Senators because higher ethanol blends may lead to a de facto E15 mandate which will place petroleum marketers in a precarious situation. On November 9, PMAA sent a letter to Senate Environment and Public Works Committee Chairman John Barrasso regarding concerns over the ethanol mandate. In the letter, PMAA highlights that the vast majority of the nation’s retail outlets, 95 percent of which are owned by independent petroleum marketing businesses, cannot legally store and dispense blends of gasoline over 10 percent ethanol. Existing equipment is certified for a maximum E10 blend. Currently, there is no viable way for UST system operators to demonstrate that existing equipment is compatible with gasoline blends over E10.

Today, chairman of the Senate Committee on Environment and Public Works John Barrasso (R-WY), sent a letter to EPA Administrator Scott Pruitt calling for the completion of overdue studies on the impact of the RFS on the environment. In the letter, Sen. Barrasso notes that “under section 211(v) of the Clean Air Act, EPA was required, by May 19, 2009, to study whether the RFS “will adversely impact air quality.” To date, EPA has never completed that study.” Furthermore, Sen. Barrasso references testimony from Jonathan Lewis of the Clean Air Task Force in which he stated that EPA’s own data shows that the additional production of corn ethanol under the RFS “has higher lifecycle greenhouse gas emissions than gasoline.”

Although PMAA is disappointed with the EPA’s decision, it’s possible that the EPA could still use its reset authority to lower the ethanol mandate as soon as next year. In addition to finalizing the biofuel volumes under the RFS yesterday, the EPA published a 14-page document titled "Periodic Reviews for the Renewable Fuel Standard Program" essentially stating that the agency has satisfied a statutory requirement to conduct periodic reviews of biofuel production technologies, the feasibility of meeting RFS standards and other facets of the program. Federal law requires the EPA to review the implementation of the RFS program before it can make changes to the overall biofuel volume requirements. Congress can also fix the broken RFS through legislation. PMAA will continue to push for logical biofuel quotas under the RFS.